As a wholesaler you should always call on the “we buy houses” signs scattere
d throughout your town. Despite the advise of gurus, I recommend you always be honest and say that you are a wholesaler working with cash buyers to do deals. I bring this up because when you start putting up signs, you will be getting called by others who claim to be cash buyers when they are just wholesalers. Knowing other wholesalers will help you leverage their time and efforts to get deals sold quicker. Like all the aspects of real estate investing, you should know what to look out for when working with wholesalers to get deals done. My advice consists of knowing your numbers, controlling the deal, working with pros, and setting a professional standard.
Watch the margins. When other wholesalers see a deal you have and want to be apart of it, they get paid one of two ways. Wholesalers will either paid a flat fee, or they will tack on top of the existing asking price as their fee. Always give them the flat fee of, 20% or 25% for bringing a buyer. I do this because most of my deals are priced to sell and I don’t want greedy people putting 5-10K on top of my deals and dragging it out for another 30days. If there were room for another 5-10K, wouldn’t you have put it in the deal? A mere 5K can kill a deal with potential buyers your wholesaler may have, so make sure they know how they will work with you upfront. Its better to have a deal than no deal.
Don’t let them put it online. Real Estate has been changed by the internet by making information readily available to the public. If a wholesaler see’s your deal and wants to give this to his buyers, that’s ok, but make sure they don’t do any web advertisements for it. This helps you do 2 things, control the message of the product, and makes you the sole point of contact. The last thing you want to see is your deal on facebook or craigslist marked up 5K and people can obviously see you have it for less. You want the message and price to be consistent and having the same price is very important.
Only deal with wholesalers who control the property. This is also very important! Real Estate passes many hands over years but if there are too many wholesalers involved its rare that a deal will get done this way. If you got a guy who has a guy, that’s too many guys! Waiting for a response or a call back because another wholesaler has to call the other guy, who may or may not have the deal, is a waste of time. Ask the wholesaler if he is in control and has the contract, if so, great, if not, you may not get the deal sold.
Ask for proof. This tip will help you save time, cell phone minutes, and gas. Wholesaling involves a lot of communication and networking among other real estate professionals. If a wholesaler ever tells me he does deals and has buyers, I ask for proof of past deals by means of address. I always ask for a website and a proof of funds from whoever they claim is their buyer. So before you drive to meet anyone anywhere, just have them send you this information. A true businessman will respect you for making sure your professional through and through. Anyone that doesn’t give you facts or details is just wasting your time.
Have everything in writing. Ask any attorney and they will say the same thing, have it all in writing! If a wholesaler says he has a buyer, great, just make sure he gets you a flex option or side agreement before you give any codes or access to property. If another wholesaler says he has buyers for your property, ask for proof. This tip does not need much more explanation, just get a piece of paper and write out whatever you’re agreeing or not agreeing on and sign it. No need to make things complicated. If you pay a wholesaler a % for bringing you a buyer, definitely make sure its in writing.
Some real estate investors coast the waters of this game, but many who are misinformed drop into shark infested waters and get beaten up. Using these tips will help you set a good standard of business that will guide you and help your image.
For more information or Wholesale deals in Chicago, just go to my website http://ChicagoCashFlowProperties.com
2 thoughts on “5 Tips of Advice When Working With Other Real Estate Wholesalers”
Everything you said is true. but I have, but the “ask for proof” section. You are asking the other wholesaler to give you information about their buyer. Wouldn’t that leave them open for you to take their buyer., and what about new wholesalers who are trying to build buyer lists and are networking with other wholesalers. If this is the way you work , then it’s fine for you but as wholesalers we have to trust that the buyers/ deals are good deals, which means shifting through the duds to find the golden nuggets. well that’s my say thanks
As a business man it doesnt make sense to cut out the wholesaler who brought they buyer because A, that buyer probably wont like your ethics and B, that wholesaler will not help you again. So its not beneficial to anyone to take a buyer, so I wont do it and I have not expereinced that in my day. but its always possible. My buyers have built trust with me and come to me if anyone else talks to them about the same property.
If I am to send a unknown wholesaler all my deals and they are going to want to get into a property, and I need to set up an appointment, I must know that their buyer is serious. If the wholesaler whom i am talking to does NOT have his buyers POF, then I am not showing up. I will give info and they can drive by, but its very important to work with others who work with you. Other wholesalers can do what they want and ask for whatever, this is just how I keep wasted time to a minimum.
If a newbie is telling me they have buyers and want deals, I will ask for proof. If they tell me straight up that they want to start building a list, I give them deals. I dont need poeple bs’ing or beating around the bush, just be honest because it makes others want to help. Its about working together and doing it with the intentions of closing deals. I share with others.
Thanks for the comment, I hope this helps!